Investor Presentation - May 2018 - NIIT
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Investor Presentation May 2018
Agenda
NIIT: Company Overview
• Corporate Learning Group
• Skills & Careers Group
• School Learning Group
FY18 Results Update
Future Direction
www.niit.com
2
NIIT: AT A GLANCE
3 36
Million Learners
Lines of
Years of Trained
36 Experience
Business
in Training GURGAON
Headquarters
in Gurgaon,
India
2475 40
NIITians Countries
worldwide
www.niit.com
NIIT: BUSINESS STRUCTURE
CORPORATE LEARNING SKILLS AND CAREERS SCHOOL LEARNING
GROUP (CLG) GROUP (SNC) GROUP (SLG)
Rs. 5,183 Million, 61% Rs. 2,729 Million, 32% Rs. 593 Million, 7%
PRODUCTIVITY EMPLOYABILITY ACADEMICS
US, Europe India, China India
• Managed Training Services • Service Sector Skills • Teaching & Learning Solutions
• Custom Projects • Professional Life Skills • School Services
*SNC, including online
www.niit.com
NIIT: CAPITAL STRUCTURE
SHAREHOLDING TOTAL CAPITAL EMPLOYED – RS. 9,044 MILLION
Debt
17%
Public
Promoters 38%
32% Net Other
Assets,
Equity 15%
83%
Fixed
FPI MF & FI Investmen Assets,
19% 11% ts*, 58% 27%
No of Shares: 166.6 million Capital Employed In Operations– Rs. 2,491 million**
www.niit.com *NIIT Limited owns 23.7% of NIIT Technologies
** Net of Cash (Rs 1291 million) and Investment
NIIT: OUR CREDENTIALS
20% higher premiums Technology
20% 1/3 We’ve trained 10M
for agents on- enabled over
1/3rd of the IT
boarded for a leading 10 M school
workforce in
Insurance company children
India
Reduction of learning Skilled over 4 M Trained over
25% expenditures by 25%
4 MN 400K
students over the 400 K school
for a diversified last 10 years across teachers to
Health and Well-being IT, ITES, BFSI, Mgmt, leverage
company Retail, Telecom technology
sectors
30% 342 74% 74% students
Reduced time to B2C
education prefer learning
proficiency by 30% in
centers mathematics
22 locations worldwide
with NIIT Math
for a global Energy
Lab
major
Corporate Learning Skills & Careers School Learning
www.niit.com
AWARDS AND RECOGNITION
58 BRANDON 2008 - 2018 TOP 20 COMPANIES
HALL AWARDS TOP 20 COMPANIES IN GAMIFICATION,
20 GOLD IN TRAINING CONTENT
20 SILVER OUTSOURCING DEVELOPMENT AND
19 BRONZE IT TRAINING
NIIT Nguru RANKED 4TH HIGHEST
NIIT received
awarded as “Best BEST COMPANY RATED
Dataquest ‘Top IT
Interactive TO WORK FOR TRAINING
Training Company’
Solution IN INDIA. NO 1 BRAND
Award for the 20th
Provider” by IN EDUCATION
consecutive year
ASSOCHAM AND TRAINING
6 CHIEF LEARNING
OFFICER LEARNING IN
2014-2018 PRACTICE AWARDS
www.niit.com
Business Overview www.niit.com
CLG: MANAGED TRAINING SERVICES
CUSTOM CONTENT LEARNING LEARNING
AND CURRICULUM DELIVERY ADMINISTRATION
DESIGN
STRATEGIC LEARNING ADVISORY
SOURCING TECHNOLOGY SERVICES
8.75K 500 25 21K 150K 40 2500 130+
Hours of custom programs Full time instructional Localization Services in Hours of custom content Training Days Global training delivery Global Network of 2500 Industry Honors and Awards
developed annually designers 25 Languages delivered annually delivered annually in 40+ countries in 15 instructors
languages
www.niit.com 9
CLG: MARQUEE CORPORATE LEARNING CUSTOMERS www.niit.com
Running Training
Like a Business
It’s not about training.
It’s about results.
30% 25% 40% 20% 40%
NIIT’s application rollout Philips improved global NIIT’s onboarding program 20% increase in average
Agents trained by the NIIT
training for Shell delivery efficiency by 25% for AON Hewitt has productivity and ticket size of
Transformative Agency
Primavera has helped with NIIT’s unified resulted in these graduates business sold across 30
Model reported strong
reduce time to proficiency Learning Administration being job-ready from day countries with 10% higher
results within a quarter of
in application training for processes in the very first one. This has not only retention over 1 year for Sales
training with a 0.95%
planners by 30% in 22 year of operation. reduced costs by 20% and Associates supported by the
increase in weekly
locations worldwide. training cycle time by 40%, NIIT enabled Global Partner
average premiums and a
but has also helped the Learning Solutions program
9.88% increase in weekly
current in-house training
average quotes.
team of our customer save
It’s not about training. It’s about
95% of their time to focus
on training needs other
www.niit.com
results.
than onboarding.
11SNC: IMPROVING EMPLOYABILITY IN ASPIRATIONAL CAREERS
ASPIRATIONAL » Information Digital Data Science Banking &
Management
Technology Marketing & Analytics Finance
CAREERS
Own Partner Inside Online
4 CHANNELS » Brick Brick Campus Channel
On Demand E- On Demand Synchronous CR
Live Synchronous
Learning (Pure MOOCs & Mode (Cloud
– Direct to Device
Online) Recorded Lectures Classroom)
Focus Geographies 7 MODES
India, China » Flipped Classroom
Immersive Project
ILT Based Learning
(Blended)
(StackRoute)
www.niit.comSKILLS AND CAREERS: OUR REACH
India: China: ROW:
227 40 75
www.niit.comSCHOOL LEARNING: PORTFOLIO AND CREDENTIALS
10 Mn +
Students
400 k + Teachers
100 k + Nodes
24 k + Hrs of Content
NEW
45 k +
Instructors
17 k + Schools
Cumulative
www.niit.comShare of A grade increased from 38% to 46%
after nGuru MathLab implementation
Impact Study Conducted by
Grade 10 Examinations
STUDENTS TEACHERS PRINCIPALS
% Respondents with positive rating on overall
BEFORE AFTER
experience with MathLab
www.niit.com 15FY18 RESULTS UPDATE www.niit.com
ENVIRONMENT
• The global economic upswing has become broader and stronger. With financial conditions still supportive, global
growth is expected to improve to 3.9 percent rate in both 2018 and 2019. Advanced economies will grow faster than
potential over the next two years. However risks are also increasing (IMF)
• Downside risks include the possibility of financial stress, increased protectionism, and rising geopolitical tensions. Focus
on reforms including improvements in education and health systems, high-quality investment, and labour market could
yield sustained long term dividends (World Bank)
• US unemployment rate near record lows at 3.9% even as AI, Robotics and Cognitive computing are changing business at
an ever increasing pace, leading to a huge war for talent. Global corporate L&D spending continues to increase as
technology disruption and regulation continues to drive demand for training. Share of spending outsourced to specialist
training providers continues to go up
• India GDP growth is expected to recover to 7.4% in 2018 and 7.8% in 2019 (IMF), after a successive decline over the last
two years as economy recovers from short term disruptions due multiple transitions in the regulatory framework
• Global IT Spending expected to grow 4.5% in 2018 to reach $3.7 Trillion, driven by projects in Digital business,
Blockchain, IOT, ML and AI (Gartner)
• Hiring by IT companies remains subdued. Net additions by major IT companies (Top 3) down more than 80% YoY in FY18
• Banks remain cautious on hiring. Increased demand for Sales and Customer relationship roles across BFSI sectors
• Spending by schools temporarily impacted in traditionally strongest quarter on lack of clarity on regulation
www.niit.comNIIT: GROWTH PLATFORMS
61% CORPORATE SCHOOLS
32% SKILLS & 7%
LEARNING CAREERS
MANAGED TRAINING DIGITAL
nGURU
SERVICES TRANSFORMATION
• 39 global MTS • DigiNxt courses added • 317 School contracts
customers 1,800+ enrolments vs 392 in Q4 FY17
• Revenue visibility at • Beyond IT contributes • Go forward Focussed
$218 million vs $199 40% vs 37% in Q4 IP led private school
million in Q3 FY18 FY17 business contributed
• 3500+ learners on 86%
Training.com • Practice Plus platform
launched. 1.9 lac users
LIQUIDITY Net Debt: INR 401 Mn Down YoY vs INR 419 Mn
PROFITABILITY EBIDTA: INR 221 Mn Up YoY vs INR 181 Mn
CAPITAL EFFICIENCY ROCE: 13.9% Up YoY vs 9.4%
www.niit.comTRANSITION TO IND-AS
CONCEPTS IMPACT AREAS
• Retrospective application of all the standards • Recognition of Revenue basis fair value for
unless exempted multiple deliverables
• Concept of Substance over Legal form of the • Strategic Sourcing Revenue is recognized on Net
arrangement basis
• Certain optional exemptions are available for the • Recognition of Deferred Tax Liability on
ease of transition to Ind-AS. Under this Fair undistributed profits of subsidiaries/ Associates
Valuation of Land and Investments in Subsidiaries • Provision for doubtful debts – on “Expected Credit
/ Associates is under consideration. Loss” model as against “Incurred Loss” model.
• Multiple deliverables in a contract are to be • ESOP expenses are recognized in P&L based on
identified based on customer’s perspective and is Fair Value as per Black Scholes method.
measured at its fair value. • Impact due to actuarial assumptions gets
• Concept of Control over the entity as against classified in “Other Comprehensive Income” (OCI)
majority shareholding to consolidate as subsidiary • Discounting of Long Term Assets & Liabilities to
or associate. present value
www.niit.comQ4 FY18: IN PERSPECTIVE
Overall NIIT
• Revenue at INR 2,228 Mn; up 6% YoY; Constant currency Revenue from Go forward Business up 10% YoY
• EBITDA at INR 221 Mn (OM of 10%) up 22% YoY; EBITDA margin up 130 bps YoY
• PAT at INR 197 Mn in Q4 FY18 vs INR 250 Mn in Q4 FY17
• Continued control on Capex & Collections leading to DSO of 71 days Vs 83 days in Q3 & Net Debt at INR 401 mn Vs INR 419 Mn
Corporate Learning Group (CLG): Continued Strong performance
• Revenue at INR 1,451 Mn up 28% YoY; Constant currency Revenue grows at 27%
• EBITDA margin at 14%; up 5 bps YoY
• Revenue Visibility at $ 218 Mn (up 18% YoY)
• Overall 39 MTS customers; Signed 5 new contracts including 3 with new MTS customers; 1 contract extension and 1 scope
extension for existing customer. Received 3 new LOIs during the Qtr
Skills & Careers Group (SNC): Rebuild phase
• Revenue at INR 584 Mn; down 16% YoY;
• EBITDA at INR -3 Mn
School Learning Group (SLG): Move towards IP led asset light business model
• Revenue at INR 176 Mn down 33% YoY due to planned ramp down of government school projects
• EBITDA at INR 40 Mn
• Signed 317 school contracts during the quarter; Focussed IP led private school business contributes 86%;
www.niit.comFY18: IN PERSPECTIVE
Overall NIIT
• Revenue at INR 8,505 Mn; up 1% YoY; Constant currency Revenue from Go forward Business up 6% YoY
• EBITDA at INR 746 Mn (OM of 9%) up 11% YoY; EBITDA margin up 80 bps YoY
• PAT at INR 625 Mn in FY18 vs INR 409 Mn in FY17; up 53% YoY
• Operational ROCE @ 13.9% up 448 bps
Corporate Learning Group (CLG): Continued Strong performance
• Revenue at INR 5,183 Mn up 14% YoY; Constant currency Revenue grows at 17%
• EBITDA margin at 15%; up 47 bps YoY
• Revenue Visibility at $ 218 Mn (up 18% YoY)
• Overall 39 MTS customers; Signed 15 MTS contracts including 8 new MTS customers
Skills & Careers Group (SNC): Rebuild phase
• Revenue at INR 2,669 Mn; down 12% YoY;
• EBITDA margin at INR 36 Mn; OM of 1%;
School Learning Group (SLG): Move towards IP led asset light business model
• Revenue at INR 593 Mn down 32% YoY due to ramp down of government school projects
• Order Intake of INR 321 Mn; signed 668 school contracts during the year
• Focussed IP led private school business contributes 66%; up 2% YoY
www.niit.comKEY FINANCIALS
INR Mn Q4 FY18 Q4 FY17 YoY Q3 FY18 QoQ FY'18 FY'17 YoY
System wide Revenue 3,151 4,011 -21% 3,405 -7% 13,511 14,213 -5%
Net Revenue 2,228 2,094 6% 2,094 6% 8,505 8,452 1%
Operating expenses 2,007 1,913 5% 1,910 5% 7,759 7,777 0%
EBITDA 221 181 22% 184 20% 746 674 11%
EBITDA% 10% 9% 130 bps 9% 114 bps 9% 8% 80 bps
Depreciation 92 109 -16% 102 -10% 401 457 -12%
EBIT 129 72 81% 82 58% 345 218 59%
Net Other Income/ (Expense) -63 -19 -44 mn -6 -57 mn -169 -203 35 mn
Operational PBT 66 52 14 mn 76 -10 mn 177 14 162 mn
Operational Tax 28 14 105% 16 79% 66 64 3%
Operational PAT 38 38 -2% 60 -37% 110 -50 322%
Associate Profit & Minority Share 200 242 -17% 174 15% 649 579 12%
Tax on Associate Profit & Minority 41 30 35% 36 12% 135 120 12%
PAT 197 250 -21% 197 0% 625 409 53%
Basic EPS (INR) 1.2 1.5 -22% 1.2 0% 3.8 2.5 52%
• Growth in Corporate Learning helps offset planned ramp down of government schools business and de-growth in SNC
• EBITDA @ 9% for FY18; up 80bps YoY
• Depreciation down 12% YoY reflecting continued reduction in capital intensity
• Negative impact of forex of INR 156 mn on Revenue and INR 44 mn on EBITDA
www.niit.comBUSINESS MIX
Q4 FY18 Q4 FY17
Schools Online Business Growth Schools
8% 1% Corporate 28% 13%
Skills &
Careers Skills & Careers -16% Skills & Corporate
26% Schools -33% Careers 54%
Online 378% 33%
Corporate
65% NIIT 6%
FY18 FY17
Business Growth
Online Schools Online
Schools Corporate 14% 0%
7% 1% 10%
Skills & Careers -12%
Skills & Schools -32%
Skills & Corporate
Careers Online 950% Careers 54%
31% Corporate
NIIT 1% 36%
61%
www.niit.comCORPORATE LEARNING GROUP
INR Mn Q4 FY18 Q4 FY17 YoY Q3 FY18 QoQ FY'18 FY'17 YoY
Net Revenues 1,451 1,134 28% 1,294 12% 5,183 4,534 14%
EBITDA 196 153 28% 198 -1% 761 644 18%
EBITDA % 14% 13% 5 bps 15% -176 bps 15% 14% 47 bps
Q4FY18
• Revenue at INR 1,451 Mn up 28% YoY (up 27% in Constant Currency)
• Eagle contributes INR 176 Mn to CLG revenue in Q4 FY18
• Signed 5 new contracts including 3 with new MTS customers; 1 contract
extension and 1 scope extension for existing customer. Received 3 new LOIs
during the Qtr
FY18
• Revenue at INR 5,183 Mn up 14% YoY (up 17% in Constant Currency)
• EBITDA at 15%, up 47 bps YoY
• Revenue Visibility increases to $ 218 Mn up 18% YoY
• Overall 39 MTS customers; Signed 15 MTS contracts including 8 new MTS
customers
• Strong pipeline of new orders
www.niit.comSKILLS AND CAREERS GROUP
Rs. Mn Q4 FY18 Q4 FY17 YoY Q3 FY18 QoQ FY'18 FY'17 YoY
Net Revenues 584 694 -16% 691 -16% 2,669 3,045 -12%
EBITDA -3 24 -28 mn 18 -21 mn 36 46 -22%
EBITDA % -1% 4% -411 bps 3% -316 bps 1% 2% -16 bps
Q4 FY18
• Q4 a relatively weak quarter for SNC; Revenue at INR 584 Mn;
• India business impacted because uncertainty in hiring & training
slowdown in IT & BFSI; Recovered profitability despite slightly lower
revenue due to cost optimization
FY18
• Revenue at INR 2,669 Mn down 12% YoY
• 5 new Career Programs in Accounting and Business Analytics;
Banking and Finance; Data Analytics and Predictive Modelling;
Digital Marketing and Branding; and Full Stack Software Engineering
• Introducing TPaaS – Talent Pipeline as a Service, which
encompasses all aspects involved in on-boarding new talent,
including talent acquisition, talent orientation, on-boarding &
integration
www.niit.comSCHOOL LEARNING GROUP
INR Mn Q4 FY18 Q4 FY17 YoY Q3 FY18 QoQ FY'18 FY'17 YoY
Net Revenues 176 262 -33% 92 90% 593 867 -32%
EBITDA 40 32 22% -21 60 mn 15 54 -72%
EBITDA % 23% 12% 1015 bps -22% 4482 bps 3% 6% -372 bps
Q4 FY18
• Overall revenue impacted due to planned ramp down of
government school projects. Last government project
expected to complete by Q2 FY19
• EBITDA at INR 40 Mn vs INR 32 Mn YoY
FY18
• Revenue from Go Forward, IP led private school business
contributes 86% to SLG revenue; up 2% YoY for FY18
• Practice Plus platform launched; 1.9 lacs users
• Released new curriculum products in Math, Science and
English
www.niit.comPEOPLE
2,475
2,425 2,433
• Headcount up 8 QoQ and
2,342
down 10 YoY
• Includes Eagle headcount
2,262
from Q4’FY18
• Excludes project retainers
Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18
www.niit.comFuture Direction www.niit.com
Corporate Learning Group Future Direction www.niit.com
CLG: CORPORATE TRAINING SPENDING Source: Bersin By Deloitte, ATD
15%
12% Corporate Training Spend
Spending Growth
10% 10% Spending on Training
6% 6%
in USA: $90+ Billion
Global Training Spend: Continues to Grow
2%
$135Bn+
-11% -11%
Increasing trend
2007 2008 2009 2010 2011 2012 2013 2014 2015
towards outsourcing
Annual Spend/Employee ($)
Professional Scientific
1,748 and Technical Services Top 3 Content Areas
535 Manufacturing Mandatory And Managerial and Profession/ Focus on
Compliance Supervisory Industry specific
Technology/Telecom
1,392 Pharma/ Healthcare 1 2 3 Energy, Lifesciences
and BFSI Industries
Finance, Insurance,
1,107 Real Estate
www.niit.com Corporate Training market represents a huge opportunityCLG: MANAGED TRAINING SERVICES
39
MTS Revenue (Rs Mn*) 4710 Number of MTS Customers 34
31
24
21
28% CAGR 6x in 7 years
14
9
6
852
FY11 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Increasing Differentiated Revenue Visibility at
contribution from competitive $218 Mn from existing
MTS positioning contracts
*Normalized MTS revenue as per IND-AS
www.niit.com MTS continues to drive steady growth for CLG business 31CLG: TAKING MTS TO NEXT LEVEL OF GROWTH
Comprehensive Engagements
3
Domain expertise
Accelerate Deal Flow
2 Global delivery capability
High Capability and
Investments in S&M Service Maturity
Productivity Big ticket annuity
1 Contract Expansion with contracts
Existing Customers
Step up people Improve Book to Bill ratio
productivity and Improve Win Rates
optimization of effort & Higher Sales Productivity
resources through
automation and tools
Improve margins for NIIT
www.niit.com Driving Scale and Profitability For CLGCLG: LEVERAGING ANALYTICS FOR CREATING CUSTOMER VALUE
“I need a one-stop shop
to get all my data so that I
can make business
decisions. My LMS won’t
give me this.”
Customer Demand
NIIT Solution
www.niit.com 33Skills and Careers Group Future Direction www.niit.com
DIGITAL TRANSFORMATION: IT SECTOR
Global Technology and Business Services Spend
Traditional Tech
Global Technology and Business
Digital Tech 3% to 4% 4100 Services to Touch USD 4 Trillion by
+1400 3550 2025
+30%
80% 35% 60%
2757 -450 to -650
10% -15% -25% 100%
20%
Share of Digital Technologies to
15%-25% of 80% of new increase to 60%
90% traditional spend around 65%
spend saved by Digital 40%
going digital Technologies
2014 Traditional New Services 2020E 2025 E
50% - 60% of today’s workforce
Spend Lines needs to be reskilled to be relevant
Evaporates by 2020
Source: IDC, NASSCOM
www.niit.com
Digital growing at 30% (1.5x faster than global digital growth rates)
35
and now ~20% of Industry ExportsSNC: DIGITAL OPPORTUNITY LANDSCAPE
Future is “Digital@Scale”
Digital Creators ~400K
Digital becoming all pervasive, blurring IT
Opportunity
industry sector boundaries
Market
Digital projects more skill intensive than Digital Developers ~4 M
people intensive
People need continuous reskilling with
consulting and design capabilities Digital Shapers ~ 40 M
Accelerating influx of new GICs; 1140+ nos.
Digital Workers ~400 M
India emerging as key hub for
Digital@scale
Source: NASSCOM
www.niit.com 36SNC: NEW PROGRAM PORTFOLIO
Expanded Portfolio of Career Programs
+ JIT Skills for Aspirational Careers
Undergraduate / Fresh Graduate
Data Science & Analytics
Banking Digital Data Accounting Term 1
IT
& Finance Mktg Analytics & Analytics Digital Marketing
GUIDED PRACTICE
Banking Digital Data Accounting Executive Management
IT Term 2
& Finance Mktg Analytics & Analytics
GUIDED PRACTICE
Banking Digital Data Accounting Banking & Finance
IT Term 3
& Finance Mktg Analytics & Analytics
Information Technology
Web developer, Customer Service Digital Data Analyst, Finance & Accounts
Application Officer, Marketing Research Analyst, Executive,
Developer, Development Executive,, Research Accounts Executive,
Developer, Officer/ARDM Marketing Associate, Data Finance Executive,
Backend, Front Financial Advisor, Analyst, SEO Science & Analytics Executive
End Developer Financial Analyst, Executive, Social Engineer, Business Accountant,
Associate Media Manager Analyst Accountant
Job Roles Consultant etc.
www.niit.comSNC: PROGRAM DESIGN
Project Based Guided Practice,
Learning for Business simulations
Immediate Practice for knowledge
retention and
decision making
ILT, Perpetual Beta
Centralized & plug-play
mentoring by components
experts
www.niit.com
Strictly Confidential 38SNC: TALENT PIPELINE AS A SERVICE
TPaaS Mandates
IT Program Analysts for
a top 3 Indian IT Services company
Full Stack Developers for
a Global Aerospace company
• Customer • Sourcing
Acquisition Banking Officers for • Training
• Relationship
B2B a leading Indian Private Bank
B2C • Placement
Management
Wealth Advisors for
a leading Indian Financial Services company
Sales Officers for a leading Indian Private Bank
Sales Officers for a leading Indian Insurance company
Voice Training for a Global IT/ITES company
www.niit.com 39School Learning Group Future Direction www.niit.com
SLG: FOCUS AREAS
Defocussed from Exited capex driven
government schools business models in
Be a School business private schools
Service Private Schools
(B2B)
Service Govt. No Nationally Dominant
Schools (B2B) Player in private schools
Large untapped
space with
opportunity in B2C space
comprehensive product
Service Private portfolio
Schools (B2B) Service Students (B2C)
Service Students Needs separate focus
(B2C) and attention
Restructured to unlock value
www.niit.com 41SLG: TRANSFORMATION
CBSE ICSE
12%
~120K Private Schools
2% IB
0.1%
State Assets • High capital intensity
Boards • High people
86%
In School Service People dependence
• Diminished value of IP
• Linear, non-scalable
IP
B2B Business
• IP driven
Cloud IP
Remote Service • Asset light
• Technology intensive
People • Non linear, highly
Services
scalable
Move to asset light, technology intensive, IP driven business model
www.niit.com 42SLG: PRACTICE PLUS
Practice Plus helps educators
understand where students
are currently in their learning
path and what they need to
learn next .
600+ 190K
Schools Users
www.niit.comYou can’t spell
TRAINING without
www.niit.com www.niit.comYou can also read
